Arbitrage Guide - Bitcoin Futures Guide

Bloomberg's Matt Levine on Bitcoin Futures Arbitrage /r/Bitcoin

Bloomberg's Matt Levine on Bitcoin Futures Arbitrage /Bitcoin submitted by BitcoinAllBot to BitcoinAll [link] [comments]

Bloomberg's Matt Levine on Bitcoin Futures Arbitrage /r/btc

Bloomberg's Matt Levine on Bitcoin Futures Arbitrage /btc submitted by BitcoinAllBot to BitcoinAll [link] [comments]

How to make guaranteed profit with bitcoin futures arbitrage when contracts are trading at a premium to spot

submitted by theswapman to WhaleClub [link] [comments]

Simple Cash and Carry Bitcoin Futures Arbitrage Guide

Simple Cash and Carry Bitcoin Futures Arbitrage Guide submitted by Bitcoin_Markets to btc [link] [comments]

How to make guaranteed profit trading bitcoin futures arbitrage when contract prices are at a premium

How to make guaranteed profit trading bitcoin futures arbitrage when contract prices are at a premium submitted by theswapman to CryptoCurrency [link] [comments]

Walkthrough for Trading Cash and Carry Bitcoin Futures Arbitrage in Bitcoin

Walkthrough for Trading Cash and Carry Bitcoin Futures Arbitrage in Bitcoin submitted by theswapman to btc [link] [comments]

Simple Cash and Carry Bitcoin Futures Arbitrage Guide

Simple Cash and Carry Bitcoin Futures Arbitrage Guide submitted by BitcoinAllBot to BitcoinAll [link] [comments]

Trader’s Guide to Bitcoin Futures – Futures Arbitrage

Most crypto traders are familiar with arbitrage across spot exchanges, i.e. buy and sell a crypto on two exchanges with different prices. However, arbitraging across bitcoin futures exchanges is something that is not very well understood.
Check this awesome guide on Futures – Futures arbitrage across crypto derivatives exchanges.
https://www.delta.exchange/blog/the-traders-guide-to-bitcoin-futures-arbitrage/
submitted by HeadInterview to Delta_Exchange [link] [comments]

09-12 12:25 - 'Bitcoin LIVE UPDATING Futures Cash n Carry Pure Arbitrage - Buy Perpetuals or Futures Low, Sell Other High!!' (self.Bitcoin) by /u/serial_psychosocio removed from /r/Bitcoin within 0-8min

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Futures Cash n Carry Arbitrage - guaranteed, risk-free arbitrage profit on FTX exchange!
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Bitcoin LIVE UPDATING Futures Cash n Carry Pure Arbitrage - Buy Perpetuals or Futures Low, Sell Other High!!
Go1dfish undelete link
unreddit undelete link
Author: serial_psychosocio
1: githu*.co**D*n**reati*eS*/F*X**nd_***r_othe*_exc**nge_futures_an*_fundi**_ar*itrage_sca*ne* 2: ww*.*outu*e*com/watch?*=**AR*pm8WA*
Unknown links are censored to prevent spreading illicit content.
submitted by removalbot to removalbot [link] [comments]

Discussion of Bitcoin arbitrage due to the impending futures market.

To arbitrage a futures contract successfully you generally need to exit your position at very close to the same price as the futures contract settlement price. Due to the highly volatile nature of the bitcoin market, it may be difficult to buy and/or sell bitcoins at the exact price at which the futures contract is settled. Arbitrage generally relies on small, but guaranteed profit, on large volume. I don't see how this is possible in the bitcoin market at this time.
My guess is that big money players will try to manipulate the BTC price just prior to the futures expiration date. One way to check this is to look for huge volume leading up to the day the futures are settled.
Currently it appears that a modest sized trade in bitcoin can move the price significantly.
So here's the strategy for the big boys:
  1. Accumulate bitcoins (already done, hence the recent price increase)
  2. Buy (or sell) futures contracts when available
  3. Buy (or sell) bitcoins just prior to futures settlement in an attempt to manipulate the price and maximizing the profit from your futures position.
Reasons why this may not work:
  1. It's illegal
  2. There will be parties vested on either side, trying to "outbid" each other to move the price of BTC.
Reasons why this might work:
  1. Huge profit potential due to the futures contract being leveraged
  2. Relative anonymity of BTC transactions (It may be hard to identify the people trying to buy/sell large amounts of BTC to manipulate the price)
I suspect buyers will outnumber sellers during the critical period before futures expiration. This is because it is easier to buy large amounts of bitcoins than sell them. You just need cash. To sell, you need bitcoins already in possesion or you need to be able to short it, both have limitations.
Just one caveat, this is pure speculation on my part and I am posting this just to get discussion and feedback. Please let me know your thoughts.
submitted by o199 to BitcoinMarkets [link] [comments]

Spot vs futures, arbitrage and all that - A mini intro to bitcoin futures

Warning: Long post
TL;DR: Futures price and spot price are tightly related by arbitrage. Futures up/down, bitcoin up/down. On their own, futures do not cause market crashes, but they may amplify them. They may also bring us to the moon much faster. Buyer beware.
 
I've noticed there's a lot of confusion around bitcoin futures:
so I thought I'd write up a short intro to clear some of these questions up. Will try to be short, but there is a quite a bit to say.
 

Forward contracts

In a forward agreement two parties agree to buy/sell something at some point in the future, let's say 1 month, for a certain price. This is it, it's just a contractual obligation to "buy/sell forward", and nothing else.
Example: I'll buy 1BTC from you, and you will sell 1BTC to me, in a month from now. Price: $7,500.
A futures is just a forward contract that is traded on an exchange. But nothing prevents Alice and Bob to enter a forward agreement outside an exchange. Remember, a forward is just a contract. The difference between a forward and a futures is the settlement. In a forward, you settle everything at the end, in a futures you settle daily. You bought and the price is up $100? You get $100. Price down $80? The exchange will take $80 from you.
Important: No money is exchanged when you enter the contract! So even though you "buy a futures", you are not paying anything right there and then.
 

Spot price vs futures price: Arbitrage

The spot price is just the price you pay/get to buy/sell bitcoin on the spot. That's what we look at all day instead of working.
Question: Is there any relation between spot and futures prices?
Answer: Yes, and a very strong one at that. Spot and futures are tightly constrained by arbitrage.
 
Arbitrage
Arbitrage is the ability to make money with no risk. Let's say Alice is happy to buy bitcoin for $8,000, Bob is selling Bitcoin for $7,500 right next to Alice, but they fail to spot each other. You buy from Bob and sell to Alice for a riskless $500 profit. One important thing here is that it must happen very quickly, or it's not risk free: If you have to wait one day, the price can collapse, and you end up losing money by selling.
What's this got to do with futures and spot prices? A lot. To illustrate why, suppose there are no buy/sell fees, and that you can borrow money for free, i.e. no interest on the money. Under these circumstances,
Spot = Futures
and the reason for it is arbitrage. This is how it works. Let's say that Futures = $8,000 > $7,500 = Spot, you can do the following:
  1. Buy bitcoin (borrow money, if necessary... it's free)
  2. Sell the futures
  3. Wait until expiry (say one month)
One month goes by, and let's say the price is now $9,000. How much money did you make? Or lose? +$500, exactly. The Profit and Loss calculation, after closing all the positions and going back to fiat, is:
Bitcoin (profit): +$1,500
Futures (loss): -$1,000
Net (profit): +$500
(This is not the total money, only the PnL... if you had the initial $7,500, you'll still have it from the sale of your BTC. If you borrowed it, you just return it.)
A similar story holds if futures < spot.
 
Important: You can replay the above with any final price for BTCand the PnL does not change.
 
So what happens if futures =/= spot? Market participants will buy/sell bitcoin to realize the riskless profit, until the arbitrage opportunity disappears... so until futures = spot. That is:
 
If futures > spot the market will buy up BTC until futures = spot.
If futures < spot the market will sell BTC until futures = spot.
 
OK... and what if the costs are not zero? The maths changes slightly, but the argument does not. It will lead to a very close relationship between spot and futures price. Not exactly identical, but very close.
 

Who needs futures?

Could go on for a long time... but I'll stick to three classes:
  1. Miners: They could "hedge" their risk by locking in a profit now instead of risking the price to go down. That's the typical role of futures, to hedge producers from price oscillations.
  2. Banks: To set up a BTC trading desk, banks need to be able to hedge their books. Buying and holding is really not an option for banks, their shareholders won't accept "1BTC = 1BTC" if the price goes down. By having futures, they can buy BTC, hedge the books with futures and so make BTC available to ALL THEIR CUSTOMERS. Giant funds will not go to Coinbase to buy/sell Bitcoin, they will call GS/JPM/DB/Barclays/... to do it. Now these funds will be able to get in the game without significant additional costs.
  3. Speculators: Speculators gonna speculate... they often make the majority of futures traders.
 

Conclusion

Should be clear that futures, on their own, will NOT cause market crashes. But they may make a market crash worse because of the leverage , liquidity issues in the futures trading, automatic triggers of buy/sell orders,...
Given the current interest in bitcoin from institutional investors, however, it is likely that it will trigger the opposite, a very rapid growth in price.
You can make up your mind if bitcoin futures are good or bad. One suggestion, don't trade futures if you don't understand what's going on... you WILL LOSE money. Mostly because you cannot just hodl futures... they expire, and if the price is down when they expire, you'll lose money.
Hope the above clears the role of futures a bit.
submitted by DesignerAccount to Bitcoin [link] [comments]

Future for Bitcoin & Crypto + Strategy – Arbitraging, Monetize, Crystal Token –

Future for Bitcoin & Crypto + Strategy – Arbitraging, Monetize, Crystal Token – submitted by Rufflenator to 3bitcoins [link] [comments]

Future for Bitcoin & Crypto + Strategy – Arbitraging, Monetize, Crystal Token –

Future for Bitcoin & Crypto + Strategy – Arbitraging, Monetize, Crystal Token – submitted by ososru to Bitcoin4free [link] [comments]

Bitwise Report 2.0: Bitcoin [BTC] Futures and Spot Market move on a concurrent basis; arbitrage strong

Bitwise Report 2.0: Bitcoin [BTC] Futures and Spot Market move on a concurrent basis; arbitrage strong submitted by n4bb to CoinPath [link] [comments]

Bitcoin price increase around 11:00 AM when CBOE futures contract expired - coincidence or the time for the big move was logical (because the arbitrage traders avoid trading at futures expiration time)? /r/Bitcoin

Bitcoin price increase around 11:00 AM when CBOE futures contract expired - coincidence or the time for the big move was logical (because the arbitrage traders avoid trading at futures expiration time)? /Bitcoin submitted by ABitcoinAllBot to BitcoinAll [link] [comments]

How To Trade Cash and Carry Bitcoin Arbitrage When There's a Futures Price Premium -- A Walkthrough

How To Trade Cash and Carry Bitcoin Arbitrage When There's a Futures Price Premium -- A Walkthrough submitted by theswapman to Bitcoin [link] [comments]

Interested in bitcoin futures premium arbitrage? See this simple walkthrough

So I put this little walkthrough together which goes through a simple example of performing an arbitrage trade exploiting price premium on a contract expiring soon:
Making money arbitraging bitcoin futures is extremely simple. They typically trade at a small premium, and all you have to do, starting with USD, is buy bitcoin at Spot price and sell futures of the same amount at premium price. Seems too easy? Let's go through it in more detail:
You've got $1000 and spot price is at BTC/USD = $400. Let's say it's a Wednesday morning. You look at the Forward curve and notice that the OKCoin weekly futures expires in 2 days and has a $5 premium, trading at $405 (ca 1% delta). In two days the futures contracts expire and will settle at Spot price, which is currently lower. You see this difference and think: there has to be a way to profit off this, right?
Simple Arbitrage Example Steps
  1. Use your $1000 to buy 2.5 bitcoin on OKCoin spot.
  2. Move your 2.5 BTC instantly from OKCoin Spot -> Futures
  3. Sell 10 Contracts ($1000) short at $405 on Weeklies
And that's it! All you have to do is wait until expiration of the contract and settlement and you guarantee $12.5 (selling 2.5 coins for $5/coin profit) or about 1% profit on this move (ex-fees/spread/etc)
I go deeper into detail on the walkthrough so if it's unfamiliar to you please read more
I'm curious, how many traders here are actually using arbitrage techniques when trading? Whether futures, inter-exchange, or whatever, what kind of strategies are you using?
I've found this cash and carry technique quite profitable, since the USD swap margin funding market collapsed on Bfx it's been a great replacement for near risk-free longer-term trades.
If any questions about the walkthrough let me know.
submitted by theswapman to BitcoinMarkets [link] [comments]

Taking advantage of futures discounts -- practicalities of Reverse Cash and Carry Arbitrage in current bitcoin exchange space

I've been thinking about these really deep discounts on the main futures exchanges (see table + chart here -- source) and what plays can be done with them.
(A side note for those with less experience: normal cash and carry arbitrage with futures is pretty easy -- see guide here. In that method you buy spot and sell the futures trading at a premium. Conversely, in situations like now, with reverse cash and carry arbitrage you have to short spot and buy the discounted futures.)
In that picture you see the futures curve on OKCoin and Cryptofacilities, and how it's in a discount ranging from 0.25-2% to spot.
In order to capture that discount, you have to be able to take a short position on some kind of spot market. There's currently 2 functioning BTC/USD spot markets that let you short: Kraken and Bitfinex. A third option might be BitMEX's "perpetual swap" which aims to trade at spot.
In all 3 cases, you end up having to pay for to borrow bitcoin in order to short the spot price. This means you will encounter carry costs (Kraken's about 0.1% per day, Bitfinex is about 0.04% a day, and BitMEX's perpetual swap has had days with 1%+ total payouts).
Some back of napkin maths shows that if you want to nab that 2% nominal discount on OKCoin quarterlies, yoǘd have to hold the short position on spot for 60 days. That would make all 3 options totally unfeasible as the interest costs would eat up your arb.
Even if there was, say, a 1% weekly discount, holding a short for 7 days is really cutting it close and making the proposition seem unattractive in general.
Does anyone have any successful model that is implemented for current markets? Or any idea of what would work?
submitted by theswapman to BitcoinMarkets [link] [comments]

How to apply futures on bitcoin to make arbitrage profit?

submitted by SpecialAgentDuffy to Bitcoin [link] [comments]

[uncensored-r/BitcoinMarkets] Discussion of Bitcoin arbitrage due to the impending futures market.

The following post by o199 is being replicated because some comments within the post(but not the post itself) have been silently removed.
The original post can be found(in censored form) at this link:
np.reddit.com/ BitcoinMarkets/comments/7hfbj6
The original post's content was as follows:
To arbitrage a futures contract successfully you generally need to exit your position at very close to the same price as the futures contract settlement price. Due to the highly volatile nature of the bitcoin market, it may be difficult to buy and/or sell bitcoins at the exact price at which the futures contract is settled. Arbitrage generally relies on small, but guaranteed profit, on large volume. I don't see how this is possible in the bitcoin market at this time.
My guess is that big money players will try to manipulate the BTC price just prior to the futures expiration date. One way to check this is to look for huge volume leading up to the day the futures are settled.
Currently it appears that a modest sized trade in bitcoin can move the price significantly.
So here's the strategy for the big boys:
  1. Accumulate bitcoins (already done, hence the recent price increase)
  2. Buy (or sell) futures contracts when available
  3. Buy (or sell) bitcoins just prior to futures settlement in an attempt to manipulate the price and maximizing the profit from your futures position.
Reasons why this may not work:
  1. It's illegal
  2. There will be parties vested on either side, trying to "outbid" each other to move the price of BTC.
Reasons why this might work:
  1. Huge profit potential due to the futures contract being leveraged
  2. Relative anonymity of BTC transactions (It may be hard to identify the people trying to buy/sell large amounts of BTC to manipulate the price)
I suspect buyers will outnumber sellers during the critical period before futures expiration. This is because it is easier to buy large amounts of bitcoins than sell them. You just need cash. To sell, you need bitcoins already in possesion or you need to be able to short it, both have limitations.
Just one caveat, this is pure speculation on my part and I am posting this just to get discussion and feedback. Please let me know your thoughts.
submitted by censorship_notifier to noncensored_bitcoin [link] [comments]

How to apply futures on bitcoin to make arbitrage profit?

submitted by HiIAMCaptainObvious to BitcoinAll [link] [comments]

Forget the whales and manipulators, since the futures were launched there is a massive arbitrage opportunity in BTC that is putting downward pressure on the price. /r/Bitcoin

Forget the whales and manipulators, since the futures were launched there is a massive arbitrage opportunity in BTC that is putting downward pressure on the price. /Bitcoin submitted by BitcoinAllBot to BitcoinAll [link] [comments]

Trading Futures & Bitcoin - Arbitrage Price Differentials ... Tutorial how to get Free Bitcoins using Arbitrage Arbitrage guide: BitMEX exchange vs Deribit - how to hedge profit on Bitcoin futures contracts? [FREE BOT CODE] Risk-Free Arbitrage Bitcoin Futures ... Challenges of Executing Arbitrage Opportunities in Bitcoin Futures & Options Trading - 3 Way w/ Fees

Futures price reflects the market sentiment of the subject’s price. Whenever there is market volatility, the spot price will deviate from the futures price significantly. The larger the difference between the two prices (basis), the better the opportunity for traders to arbitrage. Under normal circumstances, quarterly futures contracts will have a larger basis than weekly […] Bitcoin Futures Arbitrage Trading Guide Bitcoin Trading Arbitrage Guide by Trader "Swapman" Disclosure: We are a professional and educational website for bitcoin servies that sometimes receives compensation from the companies whose products we review or discuss. We test each product thoroughly and are fully independent in our recommendations and information presented. We do no endorse or ... Bitcoin futures arbitrage vs. bitcoin spot arbitrage Pros of bitcoin futures arbitrage. The ability to arbitrage price discrepancy across exchanges requires a trader to maintain balances on ... Bitcoin (BTC/USD) futures arbitrage trading strategy is possible when the market is in the Contango or Backwardation.It consists of the long (respectively short) position in an asset (in this case USD) and long (resp. short) position in the futures contract.Choosing between long and short position depends on whether the market is in Contango or Backwardation. Their job is a little complicated with these futures. Bitcoin’s wild volatility makes it harder to predict where the most-active contract, which expires in January, will settle, Tilly added.

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